Property rights conserve the land and the fish

A simple thought experiment explains the logic of extending property rights to environmental goods. Suppose our beef cattle industry were organized the same way our ocean fishing tends to operate -- a world in which ranchers did not have ranches surrounded by fences, but instead roamed the plains, and shot or rounded up as many cows as they wanted. Obviously, we'd run out of cows fairly soon, because the incentives would be wrong; anyone who left a cow behind would be risking that anyone else would get to it next. This is a well known concept referred to as the "tragedy of the commons," arising from the Medieval practice in England of allowing anyone to graze as many animals as they wished to on public land. The land quickly became over grazed. Yet, this is exactly how we manage ocean fisheries -- fish are a "common pool" resource in the ocean owned by no one, such that the perverse incentive for every individual fisher is to catch as many fish as possible. A fish left behind is a fish for someone else. This is the chief cause of the collapse of so many ocean fisheries. Some nations -- Iceland and New Zealand are the best examples -- have effectively preserved and expanded their fisheries through a property rights system known as "catch shares." Essentially, this means designating ownership of territorial waters to individual fishers, who can buy, sell, and trade the rights to catch fish in the area. It is the oceanic equivalent of fencing ranch land for the private ownership and cultivation of cattle and sheep on land...more